In an 8-1 vote to deny the Janesville-based Mercy a “certificate of need,” board members said they weren’t convinced the area needed more hospital beds.

Mercy is now proposing a $115 million, 70-bed hospital and multi-specialty clinic on a 16-acre parcel it has owned for year. It is the organization’s third plan for a hospital in the McHenry County community.

In 2003, Mercy announced plans for an $81 million hospital and clinic at the site. The proposal moved forward before being derailed when the board overseeing its approval became embroiled in a kickback scandal involving the Mercy project but not Mercy officials.

Mercy’s new plan calls for 56 new medical/surgical beds, 10 obstetrics beds and four intensive care unit beds. The building also would be about 90,000 square feet smaller and cost about $85 million less.

Mercy officials have said the need for a hospital in Crystal Lake is critical because that part of the county is growing rapidly. Transportation infrastructure hasn’t kept up with population growth, which makes access to existing emergency medical centers in the area difficult, they said.

Rich Gruber, Mercy’s vice president of community advocacy, said the new project would be much more cost effective and efficient, which he said should match up well with the board’s goal of balancing supply, demand and consumer costs in the healthcare industry.

“Because the way healthcare is practiced today has changed so much, we can do so much more in a smaller hospital than we could years ago,” Gruber said. “The vast majority of new hospitals being built in this country are 100 beds or less.”

On the same day in June that the state board gave Mercy its “intent to deny” notice, it did the same to Centegra Health System, which sought to build a $233 million, 128-bed hospital in Huntley, less than 10 miles from Mercy’s Crystal Lake site.

The board has scheduled a public hearing on Mercy’s revised plan for Friday, Oct. 7, at Crystal Lake City Hall.

While the project will get another public hearing, its “intent to deny” status remains unchanged, Courtney Avery, the board’s administrator, told the Northwest Herald newspaper.

The review board is tentatively scheduled to consider the competing plans from Mercy and Centegra—which Gruber believes hasn’t changed—in November.